Medibank Private selloff faces two-year delay
The Coalition's plans to expedite the multibillion-dollar sale of health insurance giant Medibank Private have been dealt a blow, with expectations a sale is up to two years away.
Sources say the long-mooted sale won't happen until late 2014, if not 2015, due to the complexity of the task. But others suggest the Coalition won't leave it to the tail end of its first term, because it won't want members thinking of the sale at the ballot box.
It's also unclear how the new Senate would respond to the Coalition's pitch to sell Australia's biggest health insurer.
The selloff received comparatively little attention in the lead-up to the election despite it being a key point of difference between the Coalition and Labor, and it representing the single largest financial measure to shore up the budget. The Coalition has largely adopted Labor's policy of not slashing spending to return the budget to surplus, promising only a $6 billion improvement in the budget's cash bottom line over four years.
The sale of Medibank, which was valued at $4 billion during the Howard government years, would provide a welcome boost to the budget bottom line, particularly as the new government introduces a $5.5 billion-a-year paid parental leave scheme and has committed to Labor's school funding and disability insurance schemes.
A Medibank spokeswoman said the business was yet to hear details of a proposed sale.
The Greens have not ruled out supporting a sale, but say they are waiting on detail.
A spokesman for Richard Di Natale, whose portfolio covers health, said: "We don't know who is going to be health minster, when the Parliament is coming back, the make-up of the Senate. It could take years [for a sale] as far as we know."
Independent senator Nick Xenophon said although a sale might provide a "sugar hit" for the budget, he had "serious reservations" about whether it would be in the long-term interest of policyholders or the health insurance industry.
Senator Xenophon also criticised Labor for extracting hundreds of millions of dollars in dividends from Medibank over its six-year term.
The selloff has long been considered controversial given Medibank's capital base has almost entirely been built on direct taxpayer contributions.
Some sources have suggested Medibank's 3.8 million members will receive some form of preferential eligibility in a sharemarket float.
Asset sales have diminished in recent years, beyond Queensland's Newman government selling QR National and recent port sales in NSW.
There is speculation that Australia Post could also be put on the block.
Medibank Private, which is set to release its annual report shortly, has long argued that it is not sitting around waiting for someone to say who should own the shares.
Legislation enabling the sale of Medibank was enacted by the Howard government but never repealed by Labor despite it opposing a sale.